Independent retailers, wholesalers and supermarkets alike are keeping their fingers crossed ahead of the
provisional findings of the groceries market inquiry
by the Competition Commission, which is expected next week.
Speculation has been rife over what the inquiry team, led by Peter Freeman, is likely to announce and the main parties have all said they remain hopeful that the commission will accept their arguments on a wide range of topics.
But it seems likely that independents' leaders have failed to convince the commission that the public interest is being harmed by the demise of small shops. The various working papers and Emerging Thinking indicate it has been unmoved by the contention that the decline in numbers of independent stores has restricted consumer choice - and is not even convinced there has been a decline in independent c-stores.
The commission has also concluded there is no waterbed effect, the theory that powerful supermarket buyers put so much pressure on suppliers that manufacturers recoup their losses by upping costs for wholesalers and independents.
James Lowman, chief executive of the Association of Convenience Stores, was optimistic the commission would act on the buying power of supermarkets, however.
He suggested that a 13% differential between prices paid by the multiples and small independent identified in the working paper on supplier pricing was evidence of the gap in buying power widening to dangerous levels.
This, he said, improved the case for a tightening of the Supermarkets Code of Practice. The code is the area that most grocery and competition experts believe the commission will be most likely to address. The commission has stated that many of the bad practices by supermarkets found in its 2000 investigation have continued.
A competition lawyer said it was possible the commission would recommend a rewording of the code to remove the controversial 'reasonable' test, an emphasis on written contracts, or the appointment of a monitor to remove the need for a supplier complaint to spark an investigation."It is possible in the future to reach a place where suppliers and supermarkets do trade fairly with each other," he said. "But the commission needs to find a way to relieve the current stand-off."
However a spokeswoman for Tesco said a revision of the code was unnecessary. "This whole issue has been looked at a couple of times already, and the supermarkets have all been given a clean bill of health by the OFT," she said. "We don't expect the commission to find anything different this time round."
However she admitted Tesco was still unsure of which way the commission was likely to go on some key issues, including the code and landbanking.
The findings are not expected to include any actual remedies. It is thought these will follow in November after which interested parties will have a further chance to submit their views before the final report is published in March.
The commission is also believed to be considering a way of including processors under the code.